Dollar Consolidates as Focus Moves to Central Banks and the UK Elections

We saw a bit of consolidation across the board for the dollar yesterday, it was initially on the back foot in as it followed through from Friday’s NFP data, however it recovered to bounce of it’s lows later in the session. It’s now opening the Asian session just above recent lows with the Dxy around 96.80.

Across the other currencies we had a good amount of news for the market to digest, Saudi Arabia has cut ties with Qatar with which brings greater concerns about the stability of the region and this led to a bit of a rally in the Oil price. In Europe, news that Banco Popular is in further trouble led to a widening of spreads, lowering of sentiment and pressure on the Euro. Focus will move to the ECB later in the week for Euro traders but certainly this will remain front of mind as we move ahead today.

We continue to get a wide range of data coming from election polls in the UK but the market seems to feel that things are back on track for the Conservatives and the cable and sterling have rallied well, as we’ve said before, volatility will only increase as Thursday approaches and will probable accelerate as the results filter through later in the day.

Looking ahead to today’s trading and here in Australia we have the RBA at 2.30 pm which will be the main focus for the day in Asia, once again we expect no change, but traders will be looking for changes in the statement, subtle or otherwise for fresh direction in the Aussie. It’s relatively quiet in the European session, although once again we anticipate a high focus on any developments with regard to the coming election in the UK.

Into the US session and we have the Ivey PMI data out of Canada and the JOLTS job openings from the US, but once again the news wires should supersede these in importance.

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